May 19, 2013 Leave a comment
Doz & Kosonen in Fast Strategy (2007) stated “most companies die not because they do the wrong things, but because they keep doing what used to be the right things for too long…”. The authors also state that “successful companies often become victims of their own success: when their business matures, they find it impossible to renew themselves. To regain and maintain growth they need to learn to thrive on change and disruption”.
Arsenal as a football club being managed by Arsene Wenger experienced “tremendous success” as a trophy winning club in the years from 1996 – 2005, however, the trophy cabinet has been empty for quite a while. Fans have bitterly complained about the lack of trophies and some have even advocated replacing the manager; quite harsh I must say.
There is no debate about the influence of Arsene Wenger on the Arsenal and the English premiership. He revolutionised and changed how football was played, how footballers were managed and how players can play into their thirties through the introduction of scientific approaches e.g. nutrition to football management.
The Arsenal case is a classic example that fits into the “trap of success” as described by Doz & Kosonen.
So what has happened?
Prolonged period of success: Arsenal as a team enjoyed a fairly prolonged period of success, winning the English premiership league title or finishing in the top 2 year-in, year-out for a quite a while. The club enjoyed successes winning 2 double titles during the period 1996 – 2005.
The method that was used in order to achieve those successes can be summarised as “buy young, hungry and athletic non-British footballers” who were not as expensive as their British counterparts and integrate them into the existing team. The approach worked at the very beginning, but this “young, hungry and athletic non-British footballers” integrated into a core of existing British players who formed the back four and the goal keeper and these new players stayed on for quite a while. In addition, it could be argued that the only real competition at that time was Sir Alex Ferguson’s Manchester United.
Success Syndrome: Arsenal’s strategy has not evolved despite the rapid changes in the external environment. Despite the massive change in the competitive landscape as a result of Roman Abramovich’s investment in Chelsea and in recent times by Manchester City’s newly found wealth, Arsenal remains dogged and transfixed on the strategy that had worked in the trophy winning years of Arsene Wenger. This behaviour which can be described as conservative, arrogant and complacent with a total focus on “self” is characteristic of organisations that have become a victims of their own successes.
Organisations that fail to realise there has been a change in the competitive landscape resort to “codification” i.e. let us just do more of the same; it worked in the past, so let us improve the “efficiency” of our operation. What seems particularly strange about organisations in such mode is the lack of recognition that when the goal post shifts and moves in a game of football, the strategy has to change, otherwise you become disadvantaged playing the game.
Outcomes: The outcomes can be seen – the lack of titles, lack of motivation amongst the playing staff, persistent justification of failure, disgruntled customers and fear of innovation.
Will Arsenal continue to do more of the same and enter the “death spiral”?
Overall, it is a very competitive environment and the lack of “unlimited” financial resources which the likes of Man City, PSG, Chelsea, Monaco and to some extent Real Madrid, Anzi Makhachkala, Barcelona etc. seem to possess have limited what Arsenal can do in the marketplace. However, it is important to understand that this article has only used the customers’ expectations i.e. winning and winning of more trophies as a measure of success and has not considered the owner’s (board’s) vision and mission, therefore, it could be argued that the move from Highbury, the change of ownership, the balance sheet etc. are all indicative of a successful organisation.
Whatever your measure of success, it is very important to identify and understand the source of your revenue and assess the potential impact of the loss of those revenues, especially if customers have been disgruntled for years. It is time to keep the customers happy, even if it is for a short while, otherwise “the death spiral” may be accelerated and change will have to eventually come and it will be more painful.
Perhaps it is a time for a deep and incisive strategic review of the organisation and if the purpose of the organisation is “to be competitive whilst developing young talents without breaking the bank”, no one should begrudge the organisation. There has to be an alignment of the organisation’s strategy to the mission…so change your mission statement and vision if your strategy will not change, and the fans may come to accept a top four target as a successful season.